Well, according to WeylandYuntani, Rolex watches cost 150 GBP to build, so the Sistem51 must be pure profit for the Swatch group.Profit margin on a 150 dollar automatic watch? I am guessing they aren't getting rich on these watches.
But seriously, Swatch invested quite a bit of money on R&D to establish a fully automated manufacturing process. I suspect that the profit margin on the Sistem51 is much lower than their other affordable watches, but the intention is for the technology to percolate into their other entry level movements. In particular, the Powermatic 80 that is used by Tissot seems to share some of the technology developed for the Sistem51 movement.
The Sistem51 is used to build mindshare, and provide a gateway to more expensive mechanical Swatch group watches. The funky designs also appeal to young fashion conscious people who have no need for a watch (because of their cell phones), but need an additional avenue for creative expression of their personality and their mood.
I fully appreciate one gets more in a Seiko 5, but the reality is that with the possible exception of some of the funkier Seiko 5s like the orange Baby Monsters, these are probably not a good way of attracting new interest in mechanical watches.